Dubai has announced the reinstatement of the 30% municipality tax on alcohol sales, effective from January 1, 2025. The decision, communicated through an email from alcohol retailer African + Eastern to restaurants and bars, marks the end of a temporary tax exemption introduced in January 2023.
The email stated, “Dubai Government has informed us that the 30 per cent municipality tax on alcoholic beverage purchases will be reinstated effective January 2025. This will apply to all orders invoiced from Wednesday, January 1, 2025. Dubai Municipality requests all necessary systems are in place to ensure full compliance with this fee.”
Restaurateurs have acknowledged the impact of this move on consumer buying patterns. Eti Bhasin, Executive Director at Majestic Retreat City Hotel and Permit Room, views the tax as an opportunity for outlets within hotels, expecting a shift toward on-premise consumption as restaurants and bars continue to offer discounts and deals.
The 30% tax was initially removed as part of a Dubai Municipality initiative to boost the emirate’s hospitality sector. While some businesses anticipated a partial reinstatement at a reduced rate, the return to the full 30% levy has taken many by surprise.
The reinstatement underscores Dubai’s evolving fiscal policies as it balances economic growth with municipal revenue needs.
